The records of Milwaukee Sprinkler Systems report net sales of $520,000,net income of $130,000 and average total assets of $360,000.Using DuPont analysis,calculate the two ratios used for return on assets.(Round your final answer to two decimal places. )
A)Net profit margin ratio is 2.77;Total asset turnover is 25%.
B)Net profit margin ratio is 25%;Total asset turnover is 1.44.
C)Net profit margin ratio is 36%;Total asset turnover is 4.00.
D)Net profit margin ratio is 2.50;Total asset turnover is 36%.

Question

Quizplus · Accepted Answer

Net profit margin ratio is calculated as (Net Income / Net Sales) * 100 = ($130,000 / $520,000) * 100 = 25%. Total asset turnover is calculated as Net Sales / Average Total Assets = $520,000 / $360,000 = 1.44.

The Records of Milwaukee Sprinkler Systems Report Net Sales of $520,000,net